Dr Neil Hudson MP joined 56 MPs in writing a joint letter to Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA) urging him to change the rules around banking hubs, in a bid to save banking services in areas like Penrith and The Border.
Since the passage of the Financial Services and Markets Act (2023), the FCA have become the regulator for LINK, the body responsible for assessing a community’s access to cash needs. LINK can recommend a banking hub or a similar scheme for a particular area. However, current FCA rules mean LINK are unable to recommend a banking hub until the last bank in town closes, subject to certain exceptions, risking a community’s access to cash.
The FCA are currently consulting on proposed changes to their rules. Among these include changing the “last bank in town” rule to a rule where LINK can intervene when the second-to-last bank in town closes instead.
However, Dr Hudson and his colleagues have urged the FCA to go a step further. The 57 MPs, representing eight different parties in the House of Commons, in a letter led by Conservative MP Julie Marson, have called on Mr Rathi “to grant LINK the ability to operate on a case-by-case basis” and argue that when “the direction of travel is clear… LINK should be able to recommend a banking hub” while “a few branches remain.”
The MPs argue that such a move would allow staff to be moved over to a banking hub more seamlessly and “ensure that a community is not plunged into a limbo period” where they lose their access to cash.
This comes after a wave of bank closures in Penrith were announced, with Lloyds, Barclays and Halifax set to close their doors for good this year. Dr Hudson is keen to respond swiftly and allow a continuity of services for local people.
The FCA’s consultation runs until 8th February but is primarily targeted at businesses and banks.
Commenting, Dr Neil Hudson MP, said:
"This common sense approach to community banking will see consumers able to retain a continuity of services.
"It puts communities in the driving seat, which for areas like ours with closing high street banks and digital connectivity challenges,will be a welcome change."
Julie Marson MP, who is spearheading the campaign, added:
“I’m very grateful to Neil and all other colleagues for signing the letter. We look forward to receiving Mr Rathi’s response in due course and seeing more banking hubs on our high streets.”
